Net benefits of urban slums redevelopment policies on the value of adjacent residential property
Abstract
Over time, the government of Pakistan introduced several strategies to deal with the issue of slums in its capital city, Islamabad. Contrary to the traditional strategies that primarily focus on the tenure security of occupants, the strategy of slum redevelopment is more composite. It involves the up-gradation of slums in their existing sites as well as the demolition of slums from the posh areas. The present study is first to empirically investigates the outcomes of the slums redevelopment policies on the value of adjacent residential properties. Using a rental valuation based hedonic price model, the study examined the spillover effects of an urban slum up-gradation and eviction projects on the nearby housing values. The results show that the redevelopment of slums reduces the adverse effects on residential value. It is essential for the urban planners to cautiously include the slum redevelopment projects spillover effects on the adjacent property value in different geographical locations, to maximize the net positive effects of improvements on the neighborhood.
Keyword : slums, up-gradation, demolition, hedonic price model, property value, Pakistan
How to Cite
Hussain, T., & Wei, Z. (2021). Net benefits of urban slums redevelopment policies on the value of adjacent residential property. International Journal of Strategic Property Management, 25(3), 228-239. https://doi.org/10.3846/ijspm.2021.14570
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Lee, C.-c., Liang, C.-M., & Chen, C.-Y. (2017). The impact of urban renewal on neighborhood housing prices in Taipei: an application of the difference-in-difference method. Journal of Housing and the Built Environment, 32(3), 407–428.
https://doi.org/10.1007/s10901-016-9518-1
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Malik, S., Roosli, R., & Tariq, F. (2020). Investigation of informal housing challenges and issues: experiences from slum and squatter of Lahore. Journal of Housing and the Built Environment, 35, 143–170.
https://doi.org/10.1007/s10901-019-09669-9
McCord, J., McCord, M., McCluskey, W., Davis, P. T., McIlhatton, D., & Haran, M. (2014). Effect of public green space on residential property values in Belfast metropolitan area. Journal of Financial Management of Property and Construction, 19(2), 117–137. https://doi.org/10.1108/JFMPC-04-2013-0008
Muhammad, I. (2017). Disamenity impact of Nala Lai (open sewer) on house rent in Rawalpindi city. Environmental Economics and Policy Studies, 19(1), 77–97.
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Mukhija, V. (2002). An analytical framework for urban upgrading: property rights, property values and physical attributes. Habitat International, 26(4), 553–570.
https://doi.org/10.1016/S0197-3975(02)00019-X
Newell, T. A. (2010). Development and neighborhood revitalization: the effects of residential investment on property values in Durham, NC. Michigan Journal of Business, 3(2), 97–120.
Nijman, J. (2008). Against the odds: slum rehabilitation in neoliberal Mumbai. Cities, 25(2), 73–85.
https://doi.org/10.1016/j.cities.2008.01.003
Palmquist, R. B. (1984). Estimating the demand for the characteristics of housing. The Review of Economics and Statistics, 66(3), 394–404. https://doi.org/10.2307/1924995
Park, J. H., Lee, D. K., Park, C., Kim, H. G., Jung, T. Y., & Kim, S. (2017). Park accessibility impacts housing prices in Seoul. Sustainability, 9(2), 185. https://doi.org/10.3390/su9020185
Patel, K. (2013). A successful slum upgrade in Durban: a case of formal change and informal continuity. Habitat International, 40, 211–217. https://doi.org/10.1016/j.habitatint.2013.05.005
Pope, D. G., & Pope, J. C. (2012). Crime and property values: evidence from the 1990s crime drop. Regional Science and Urban Economics, 42(1), 177–188.
https://doi.org/10.1016/j.regsciurbeco.2011.08.008
Riddell, K. (2016). Islam and the securitisation of population policies: muslim states and sustainability. Taylor & Francis. https://doi.org/10.4324/9781315589954
Rosen, S. (1974). Hedonic prices and implicit markets: product differentiation in pure competition. Journal of Political Economy, 82(1), 34–55. https://doi.org/10.1086/260169
Rosenthal, S. S., & Helsley, R. W. (1994). Redevelopment and the urban land price gradient. Journal of Urban Economics, 35(2), 182–200. https://doi.org/10.1006/juec.1994.1012
Shukur, F., Othman, N., & Nawawi, A. H. (2012). The values of parks to the house residents. Procedia - Social and Behavioral Sciences, 49, 350–359.
"https://doi.org/10.1016/j.sbspro.2012.07.033
Simons, R., Quercia, R., & Levin, I. (1998). The value impact of new residential construction and neighborhood disinvestment on residential sales price. Journal of Real Estate Research, 15(2), 147–161. https://doi.org/10.1080/10835547.1998.12090921
Trojanek, R., & Gluszak, M. (2018). Spatial and time effect of subway on property prices. Journal of Housing and the Built Environment, 33(2), 359–384.
https://doi.org/10.1007/s10901-017-9569-y
Tse, R. Y., & Love, P. E. (2000). Measuring residential property values in Hong Kong. Property Management, 18(5), 366–374. https://doi.org/10.1108/02637470010360669
Xiao, Y. (2017). Hedonic housing price theory review. In Urban morphology and housing market (pp. 11–40). Springer. https://doi.org/10.1007/978-981-10-2762-8_2
Yang, L., Zhou, J., Shyr, O. F., & Huo, D. (2019). Does bus accessibility affect property prices? Cities, 84, 56–65.
https://doi.org/10.1016/j.cities.2018.07.005
Zabel, J. E., & Guignet, D. (2012). A hedonic analysis of the impact of LUST sites on house prices. Resource and Energy Economics, 34(4), 549–564. https://doi.org/10.1016/j.reseneeco.2012.05.006
Zahirovich-Herbert, V., & Gibler, K. M. (2014). The effect of new residential construction on housing prices. Journal of Housing Economics, 26, 1–18. https://doi.org/10.1016/j.jhe.2014.06.003
Zawadzki, S. J., Mainzer, S., McLaughlin, R. A., & Luloff, A. E. (2017). Close, but not too close: landmarks and their influence on housing values. Land Use Policy, 62, 351–360.
https://doi.org/10.1016/j.landusepol.2017.01.004
Zhang, Y., Zheng, S., Song, Y., & Zhong, Y. (2016). The spillover effect of urban village removal on nearby home values in Beijing. Growth and Change, 47(1), 9–31.
https://doi.org/10.1111/grow.12122
Zheng, X., Li, J.-x., Zheng, L., & Lv, J. (2020). Multi-owned property, urban renewal and neighborhood property value externalities: revisiting the Hong Kong case. Cities, 107, 102915. https://doi.org/10.1016/j.cities.2020.102915
Asian Development Bank and Inter-American Development Bank. (2014). Sustainable urbanization in Asia and Latin America. Asian Development Bank.
Basu, S., & Thibodeau, T. G. (1998). Analysis of spatial autocorrelation in house prices. The Journal of Real Estate Finance and Economics, 17(1), 61–85.
https://doi.org/10.1023/A:1007703229507
Bauer, T. K., Braun, S. T., & Kvasnicka, M. (2017). Nuclear power plant closures and local housing values: evidence from Fukushima and the German housing market. Journal of Urban Economics, 99, 94–106. https://doi.org/10.1016/j.jue.2017.02.002
Bello, V. A., & Bello, M. O. (2009). Valuation of properties in close proximity to waste dumps sites: the Nigeria experience. International Journal of Strategic Property Management, 13(4), 309–317. https://doi.org/10.3846/1648-715X.2009.13.309-317
Bowes, D. R., & Ihlanfeldt, K. R. (2001). Identifying the impacts of rail transit stations on residential property values. Journal of Urban Economics, 50(1), 1–25.
https://doi.org/10.1006/juec.2001.2214
Cerrato Caceres, B., & Geoghegan, J. (2017). Effects of new grocery store development on inner-city neighborhood residential prices. Agricultural and Resource Economics Review, 46(1), 87–102. https://doi.org/10.1017/age.2016.29
Chen, W. Y., & Jim, C. Y. (2010). Amenities and disamenities: a hedonic analysis of the heterogeneous urban landscape in Shenzhen (China). The Geographical Journal, 176(3), 227–240. https://doi.org/10.1111/j.1475-4959.2010.00358.x
Das, S., Mitra, A., & Kumar, R. (2017). Do neighbourhood facilities matter for slum housing? Evidence from Indian slum clusters. Urban Studies, 54(8), 1887–1904.
https://doi.org/10.1177/0042098016634578
De Sousa, C. A., Wu, C., & Westphal, L. M. (2009). Assessing the effect of publicly assisted brownfield redevelopment on surrounding property values. Economic Development Quarterly, 23(2), 95–110. https://doi.org/10.1177/0891242408328379
Grislain-Letrémy, C., & Katossky, A. (2014). The impact of hazardous industrial facilities on housing prices: a comparison of parametric and semiparametric hedonic price models. Regional Science and Urban Economics, 49, 93–107.
https://doi.org/10.1016/j.regsciurbeco.2014.09.002
Hussain, T., Abbas, J., Wei, Z., Ahmad, S., Xuehao, B., & Gaoli, Z. (2021). The urban villages disamenity impact on neighboring residential property: an empirical evidence from Nanjing through hedonic pricing model appraisal. Journal of Urban Planning and Development, 147(1), 04020055.
https://doi.org/10.1061/(ASCE)UP.1943-5444.0000645
Hussain, T., Abbas, J., Wei, Z., & Nurunnabi, M. (2019). The effect of sustainable urban planning and slum disamenity on the value of neighboring residential property: application of the hedonic pricing model in rent price appraisal. Sustainability, 11(4), 1144. "https://doi.org/10.3390/su11041144
Jayantha, W. M., & Chun Ming, C. (2015). The effect of urban redevelopment on retail shopping property values: a case study in Hong Kong. International Journal of Urban Sciences, 19(3), 379–399. https://doi.org/10.1080/12265934.2015.1095111
Jim, C. Y., & Chen, W. Y. (2006). Impacts of urban environmental elements on residential housing prices in Guangzhou (China). Landscape and Urban Planning, 78(4), 422–434.
https://doi.org/10.1016/j.landurbplan.2005.12.003
Jung, E., Choi, Y., & Yoon, H. (2016). The impact of the Gyeongui Line Park project on residential property values in Seoul, Korea. Habitat International, 58, 108–117.
ttps://doi.org/10.1016/j.habitatint.2016.10.002
Karanikolas, N., & Louka, E. (2012). The effect of metro station on commercial values of residential properties. The case study of Thessaloniki, Greece before the completion of the metro project construction. International Journal of Academic Research, 4, 136–143.
Kaufman, D. A., & Cloutier, N. R. (2006). The impact of small brownfields and greenspaces on residential property values. The Journal of Real Estate Finance and Economics, 33(1), 19– 30. https://doi.org/10.1007/s11146-006-8272-7
Ki, C. O., & Jayantha, W. M. (2010). The effects of urban redevelopment on neighbourhood housing prices. International Journal of Urban Sciences, 14(3), 276–294.
https://doi.org/10.1080/12265934.2010.9693685
Kiel, K. A. (2017). Environmental contamination and house values. In J. I. Carruthers, & B. Mundy (Eds.), Environmental Valuation (pp. 139–164). Routledge.
https://doi.org/10.4324/9781351158961
Lee, C.-c., Liang, C.-M., & Chen, C.-Y. (2017). The impact of urban renewal on neighborhood housing prices in Taipei: an application of the difference-in-difference method. Journal of Housing and the Built Environment, 32(3), 407–428.
https://doi.org/10.1007/s10901-016-9518-1
Liang, C.-M., Lee, C.-C., & Yong, L.-R. (2020). Impacts of urban renewal on neighborhood housing prices: predicting response to psychological effects. Journal of Housing and the Built Environment, 35(1), 191–213. https://doi.org/10.1007/s10901-019-09673-z
Liu, Y., Hao, P., van Oort, F., Geertman, S., & Lin, Y. (2015). The effects of urban redevelopment on housing prices in Shenzhen [Conference presentation]. 14th International Conference on Computers in Urban Planning and Management (CUPUM 2015), Massachusetts Institute of Technology, Cambridge, MA.
Malik, S., Roosli, R., & Tariq, F. (2020). Investigation of informal housing challenges and issues: experiences from slum and squatter of Lahore. Journal of Housing and the Built Environment, 35, 143–170.
https://doi.org/10.1007/s10901-019-09669-9
McCord, J., McCord, M., McCluskey, W., Davis, P. T., McIlhatton, D., & Haran, M. (2014). Effect of public green space on residential property values in Belfast metropolitan area. Journal of Financial Management of Property and Construction, 19(2), 117–137. https://doi.org/10.1108/JFMPC-04-2013-0008
Muhammad, I. (2017). Disamenity impact of Nala Lai (open sewer) on house rent in Rawalpindi city. Environmental Economics and Policy Studies, 19(1), 77–97.
https://doi.org/10.1007/s10018-015-0136-z
Mukhija, V. (2002). An analytical framework for urban upgrading: property rights, property values and physical attributes. Habitat International, 26(4), 553–570.
https://doi.org/10.1016/S0197-3975(02)00019-X
Newell, T. A. (2010). Development and neighborhood revitalization: the effects of residential investment on property values in Durham, NC. Michigan Journal of Business, 3(2), 97–120.
Nijman, J. (2008). Against the odds: slum rehabilitation in neoliberal Mumbai. Cities, 25(2), 73–85.
https://doi.org/10.1016/j.cities.2008.01.003
Palmquist, R. B. (1984). Estimating the demand for the characteristics of housing. The Review of Economics and Statistics, 66(3), 394–404. https://doi.org/10.2307/1924995
Park, J. H., Lee, D. K., Park, C., Kim, H. G., Jung, T. Y., & Kim, S. (2017). Park accessibility impacts housing prices in Seoul. Sustainability, 9(2), 185. https://doi.org/10.3390/su9020185
Patel, K. (2013). A successful slum upgrade in Durban: a case of formal change and informal continuity. Habitat International, 40, 211–217. https://doi.org/10.1016/j.habitatint.2013.05.005
Pope, D. G., & Pope, J. C. (2012). Crime and property values: evidence from the 1990s crime drop. Regional Science and Urban Economics, 42(1), 177–188.
https://doi.org/10.1016/j.regsciurbeco.2011.08.008
Riddell, K. (2016). Islam and the securitisation of population policies: muslim states and sustainability. Taylor & Francis. https://doi.org/10.4324/9781315589954
Rosen, S. (1974). Hedonic prices and implicit markets: product differentiation in pure competition. Journal of Political Economy, 82(1), 34–55. https://doi.org/10.1086/260169
Rosenthal, S. S., & Helsley, R. W. (1994). Redevelopment and the urban land price gradient. Journal of Urban Economics, 35(2), 182–200. https://doi.org/10.1006/juec.1994.1012
Shukur, F., Othman, N., & Nawawi, A. H. (2012). The values of parks to the house residents. Procedia - Social and Behavioral Sciences, 49, 350–359.
"https://doi.org/10.1016/j.sbspro.2012.07.033
Simons, R., Quercia, R., & Levin, I. (1998). The value impact of new residential construction and neighborhood disinvestment on residential sales price. Journal of Real Estate Research, 15(2), 147–161. https://doi.org/10.1080/10835547.1998.12090921
Trojanek, R., & Gluszak, M. (2018). Spatial and time effect of subway on property prices. Journal of Housing and the Built Environment, 33(2), 359–384.
https://doi.org/10.1007/s10901-017-9569-y
Tse, R. Y., & Love, P. E. (2000). Measuring residential property values in Hong Kong. Property Management, 18(5), 366–374. https://doi.org/10.1108/02637470010360669
Xiao, Y. (2017). Hedonic housing price theory review. In Urban morphology and housing market (pp. 11–40). Springer. https://doi.org/10.1007/978-981-10-2762-8_2
Yang, L., Zhou, J., Shyr, O. F., & Huo, D. (2019). Does bus accessibility affect property prices? Cities, 84, 56–65.
https://doi.org/10.1016/j.cities.2018.07.005
Zabel, J. E., & Guignet, D. (2012). A hedonic analysis of the impact of LUST sites on house prices. Resource and Energy Economics, 34(4), 549–564. https://doi.org/10.1016/j.reseneeco.2012.05.006
Zahirovich-Herbert, V., & Gibler, K. M. (2014). The effect of new residential construction on housing prices. Journal of Housing Economics, 26, 1–18. https://doi.org/10.1016/j.jhe.2014.06.003
Zawadzki, S. J., Mainzer, S., McLaughlin, R. A., & Luloff, A. E. (2017). Close, but not too close: landmarks and their influence on housing values. Land Use Policy, 62, 351–360.
https://doi.org/10.1016/j.landusepol.2017.01.004
Zhang, Y., Zheng, S., Song, Y., & Zhong, Y. (2016). The spillover effect of urban village removal on nearby home values in Beijing. Growth and Change, 47(1), 9–31.
https://doi.org/10.1111/grow.12122
Zheng, X., Li, J.-x., Zheng, L., & Lv, J. (2020). Multi-owned property, urban renewal and neighborhood property value externalities: revisiting the Hong Kong case. Cities, 107, 102915. https://doi.org/10.1016/j.cities.2020.102915